June 2013

Fiscal Fight Takes Toll on Military Readiness

June 2013

by Lt. Gen. Lawrence P. Farrell, Jr., USAF (Ret)

During fiscal year 2013, the Defense Department was funded by temporary measures, or continuing resolutions, that put a huge crimp on operations and maintenance spending. The stopgap measure set O&M budgets at the same level as 2012, and created a funding crunch for the military services as the cost of operations increased and appropriations were delayed.

The effects of this have been reflected in the cancellations of all non-essential O&M expenditures — training, travel, conferences — and curtailment of lower priority activities. Once the continuing resolution was replaced with a full-year budget — with sequester on top — the squeeze became more intense. The administration’s proposed fiscal year 2014 budget was dropped not only late, but without consideration of sequester, so it became essentially DOA. The 2014 budget does, however, reflect priorities.

To cope with the disruption, the Defense Department is seeking congressional approval to reallocate funds in order to plug holes in O&M accounts. A draft reprogramming document for fiscal year 2013 is now circulating.

The 2013 sequester takes about $12 billion from each service. The bill paying accounts primarily will be research, development and procurement. The total hit for defense was $41 billion, but that now is moving toward $37 billion. The O&M deficit posits civilian furloughs of 14 days for civilians. The Air Force and Navy have the money to avoid this, but the Army doesn’t. The Pentagon policy is “one team, one fight,” which means that if the Army can’t find a way to avoid furloughs, the Air Force and Navy must also participate. The other big losers are training, combat readiness and system maintenance.

The Air Force loses 203,000 flight hours, or the equivalent to two months of flying. Thirteen squadrons are now grounded — nine fighter, four bomber. Weapons system sustainment loses 18 percent while O&M drops by 10 percent. The Air Force estimates that recouping combat readiness will take at least six months, and nearly five years to make up the lost maintenance on existing systems. The service’s overall ability to respond to contingencies is down by one-third.

There is intense pressure to execute acquisition programs, as unobligated funds will be swept off the table, perhaps never to return. The Air Force assumes that sequester and continuing resolutions will return in fiscal year 2014. The impact of that will be one-third of pilots won’t fly and no officer will enter pilot training.

Unlike 2013, when prior year unobligated dollars are available to soften the blow, no such funds will be available in 2014. It will be a tougher year.

The 2013 budget will eliminate three to five F-35 aircraft. Air Force leaders insist that the acquisition system must be sped up to preserve appropriated dollars for programs before they expire. Their priorities are the KC-46 refueling tanker, the F-35 and the long-range bomber, which they will protect by reprogramming from the lowest 20 to 30 programs. The fiscal year 2015 budget is expected to reveal major strategic decisions.

The Army has a major O&M shortfall that has resulted in cancellation of six major combat exercises. Equipment repairs and facility maintenance have been deferred, and readiness is rapidly eroding. The Army entered fiscal year 2013 with an O&M deficit of approximately $18 billion. A modified continuing resolution fixed about $6 billion, but the Army’s bill for war cost increases of about $7.5 billion still has to be paid. The remaining $6 billion must be absorbed in internal reprogramming.

The 2013 budget will see decreases in AH-64 and CH-47 helicopter buys. Army priorities are soldier and squad readiness, and troop quality of life. Investment priorities are communications networks, the ground combat vehicle, the joint light tactical vehicle and armored multipurpose vehicle — a replacement for the M113. Officials estimate that the Army will enter fiscal year 2014 with hollow readiness.

The Navy was successful in securing funds to begin construction of the new CVN-79 aircraft carrier, put CVN-72 into overhaul, and decommission CVN-65. Beginning ship construction on time is a priority for the service. Nevertheless, training and readiness are suffering and, at the current pace, two-thirds of the fleet will be in non-combat status over the coming months. If continued through fiscal year 2014, that number rises to 80 percent. Maintenance is also behind. The 2013 budget eliminated P-8 maritime surveillance aircraft, Navy F-35Cs and Marine Corps’ F-35Bs.

Entering 2014, the Navy’s maintenance backlog will continue. Future plans are to retire 20 ships in fiscal year 2015, reducing the fleet down to 270 ships, although the Navy plans to build back up to 306 in the out years. Chief of Naval Operations Adm. Jonathan Greenert asserts the shipbuilding program will support this. Lawmakers have raised doubts.

The Marine Corps has more than half of its tactical units at unacceptable readiness and one-third of flying units below standards. Tiered readiness is incompatible with the Corps’ crisis response responsibility. Although the Marine Corps received extra funds for maintenance, it has a huge backlog of equipment that needs repair. Like the other services, home bases and ranges are underfunded. Its primary concern is the ability to support the combatant commanders — read near-term readiness — with emphasis on rebalance to the Pacific. A bow wave of readiness and maintenance problems is washing into 2014.

For all services, the hiring freeze continues and furloughs are on the horizon. The five-year spending plan is flat — per the Air Force, “flat is the new up.” And all await the outcome of Defense Secretary Chuck Hagel’s “strategic choices management review.” Based on that outcome, expect major adjustments in the 2015 budget.

The draft reprogramming document seeks $9 billion in funding adjustments, with the largest share, $5 billion, for the Army. The reprogramming follows the priorities in the 2014 budget request, and its focus is to address the O&M problem. This suggests that, as there are still other imbalances to be fixed, another omnibus reprogramming is on the horizon, perhaps in June.

The biggest problem, though, seems to be underappreciated by the political leadership. That is the huge readiness deficit that is building. That deficit not only reduces the ability of military forces to execute today’s missions. It also undercuts the ability to respond to unanticipated contingencies. Underappreciated as well is the potential reduction in safety margins and potential lives lost due to low readiness.

The maintenance backlog that is huge and growing daily, in combination with the worsening readiness shortfalls, will take years and large sums of money to correct. The only sure way to address these problems is for the services to get real budgets. Continuing resolutions accompanied by sequester and limited reprogramming authority are unacceptable.